After surpassing $21,000 on the back of a positive Consumer Price Index (CPI) report over the weekend, (BTC) has held above $21,000 in the past three days. It raises the question, have we reached the end of the bear cycle?
Bitcoin at $21K: Signs of the End of a Bear Cycle?
The CPI report hasn’t been the only positive for Bitcoin lately. Since the beginning of 2023, Bitcoin has gained 27.50% (22.7% in the last week), giving up losses on FTX and showing signs that predate the famous 2019 bull run.
Bitcoin (BTC) seven-day price chart. Source: CoinMarketCap
Before the CPI report was released, Bitcoin had jumped to $40 billion. This is the highest volume recorded since January 2021. This week’s bullish candle is similar to the one formed two years ago.
Bitcoin size chart.
Holding bitcoin above $21k for three days also increased the amount of on-chain gains compared to losses for the first time since June 2022. It also relieved miners who were forced to sell their bitcoins.
Also significantly, bitcoin mining difficulty jumped 10.3% on January 16 to reach an all-time high of 37.73 trillion at block height 772128. All of this happened on the back of Bitcoin hashes opening the year at ATH.
Bitcoin mining difficulty. Source: Queenwares
At $21K, Bitcoin is once again trading above the achieved price. For these reasons, many believe that the November 2022 low of $15.5K was the bottom, and BTC will continue to rise until 2024 when the next halving takes place.
Popular trader and creator of the Stock-to-Flow model, PlanB, tweeted his prediction.
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My 2 session on #bitcoin price: – November 2022 low at $15,5K was the bottom – BTC has crossed the short term holder (STH) and will halve in 2024 and subsequent bull market in 2025. Several on-chain signals confirm the STH signal. – 2024 halving will be >$32k – 2025$ bull market >$100k pic.twitter.com/0QtbeOXwsG
– PlanB (@$100 trillion) Jan 12, 2023
Not everyone thinks so
After nearly 13 months of bearish and sideways trend, some analysts are still not convinced that the downward cycle will end. Popular commentator The Crypto Lemon believes that Bitcoin will drop further.
Fellow commentator il Capo of Crypto describes the recent gains as the biggest bull trap he has seen. He claims that bitcoin could drop to $12,000.
As I have said many times, Bear Market shows people’s true colors. And in the end, the market (and life) humiliates everyone. 12k is still likely IMO.
– il Capo Of Crypto (@CryptoCapo_) January 14, 2023
What does the current bitcoin range say
While the recent rally in BTC has divided market analysts, what does the current price range say? Firstly, the Bitcoin Fear and Greed Index is now at 51/100 (neutral) – exiting the fear zone for the first time in nine months.
However, at $21K, Bitcoin is currently facing significant resistance. BTC also broke above the 1.0 mark of Glassnode’s aSOPR pattern.
A convincing break above 1.0 of the historically realized profit/loss ratio indicates a turnaround of the cycle system. If BTC holds above this level, we can truly say that the bullish trend continues.
Why should you bother
While this week’s strong rally is dividing market analysts about the potential direction of bitcoin, many of the metrics we’re seeing right now often define a bull market.